Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 4:51 pm on 10th March 1999.

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Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry 4:51 pm, 10th March 1999

My hon. Friend anticipates my argument only too well. If only the Government could anticipate it, heed it and change their policy.

This Budget contains changes to the value added tax rules—a £70 million increase; changes in VAT group treatment—a £5 million increase; and an end to VAT exemption on financing—a £95 million increase. I see that the Chancellor is trying to find those figures, so he obviously does not know about them either. For taxation of reverse premiums, there is a £20 million increase. Stamp duty is increasing; I wonder whether that is the Chancellor's revenge on the right hon. Member for Hartlepool (Mr. Mandelson). He reads that the right hon. Gentleman is about to buy a flat for a little over half a million pounds, and up goes the stamp duty. Perhaps we should call it Peter's pence from now on.

There are increased car taxes and fuel duties. The Chancellor says in his "Budget for business" that some taxes will go down next year, and he is right—I have found two of them: a £10 million reduction in value added tax on "certain supplies", although they are not specified; and £5 million in tax relief for employer-loaned computers. Whoopee! That will make a real difference to business when it is set against the £25,000 million in extra taxes from the Chancellor's first two Budgets and the substantial increases in this year's. I assume that the borrowed computers are needed to help people to work out all the stealth taxes that they and their businesses must pay in the financial year 1999–2000.

The overall impact next year on British business will be the raising of the tax burden by a substantial amount according to the Chancellor's own figures, as set out in "Budget 99", his own document. There are no overall tax reductions for business next year. There are massive increases from three Budgets—the largest of them from Budgets one and two and smaller further increases in Budget three.

What do the Prime Minister and the Chancellor say about the Budget? The Prime Minister says that it is another Budget to bring an end to boom and bust. That is his favourite soundbite. Out of his limited repertoire of tired and misleading phrases, "bringing an end to boom and bust" is the most overused and misleading.